What is the primary purpose of title insurance?

The primary purpose of title insurance is to protect against losses from title defects. Title insurance provides financial protection for property owners and lenders against issues that can arise from claims against the title to the property. These issues may include undisclosed liens, errors in public records, fraud, or disputes over the ownership of the property. When a title defect is discovered after the property is purchased, title insurance helps cover the legal fees and any financial losses incurred as a result of the defect.

This protection is crucial because, unlike other types of insurance that cover future events, title insurance specifically addresses issues that may have existed before the policy was issued. Thus, it plays a vital role in real estate transactions by providing peace of mind to buyers and lenders that their investment is safeguarded against certain risks that could affect their ownership rights.